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Sen. Charles Schumer (D-NY)
According to Schumer, the lawsuit will destroy the publishing industry

A U.S. senator has urged the Department of Justice to drop the eBooks lawsuit against Apple and certain book publishers.

Sen. Charles Schumer (D-NY) recently wrote a memo to the U.S. Department of Justice via The Wall Street Journal in an effort to put a stop to the eBooks lawsuit filed against Apple and two other book publishers. According to Schumer, the lawsuit will destroy the publishing industry.

Schumer said that Amazon had a strong hold of the eBooks market early on when it launched its Kindle e-reader devices. In fact, Amazon had about 90 percent of the eBooks market with no real competition. This made it so publishers and authors were at Amazon's mercy when it came to pricing.

Amazon would set the price for its eBooks far below normal hardcover value because it had an extensive library. Publishers either had to accept these lower prices or avoid the eBooks market entirely, which didn't seem to make sense when everything is going digital.

However, when Apple came along with iBooks, it employed an agency sales model with five book publishers, including Hachette Livre (Lagardère Publishing France); Harper Collins (News Corp., U.S.A.); Simon & Schuster (CBS Corp., U.S.A.); Penguin (Pearson Group, United Kingdom), and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).

An agency sales model means that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price.

The Department of Justice saw this as anticompetitive, claiming that Apple was trying to thwart Amazon's dominance in order to have a successful iBooks launch for its brand-new tablet at the time: the iPad.

However, Schumer believes that Apple's entry into the eBooks market finally gave Amazon some competition and even lowered some eBook prices for consumers. Users also had a larger range of books and platforms to choose from.

"I am concerned that the mere filing of this lawsuit has empowered monopolists and hurt innovators,” said Schumer. “I believe it will have a deterrent effect not only on publishers but on other industries that are coming up with creative ways to grow and adapt to the Internet."

It was recently announced that eBook trial was set for June 3, 2013. Harper Collins, Simon & Schuster and Hachette Livre decided to settle the case with the U.S. DOJ a couple of months ago, but Apple, Penguin and Macmillan have decided to fight the antitrust case. 

"The administration needs to reassess its prosecution priorities," continued Schumer. "Justice Department officials currently have comprehensive guidelines in place to determine when they should challenge mergers, but they have no such guidelines for non-merger investigations. It's time to come up with some. These new guidelines should take a broad, pragmatic view of the market as a whole. As the e-books case shows, this kind of perspective is sorely missing today."

Source: The Wall Street Journal



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Chuck
By lightfoot on 7/19/2012 1:44:17 PM , Rating: 5
quote:
An agency sales model means that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price.

So basically Chuck is saying is that the publishing industry will die if Apple isn't allowed to dictate terms to publishers instead of Amazon negotiating with them.

I wonder how much Apple is paying this guy.




RE: Chuck
By StevoLincolnite on 7/19/2012 2:22:39 PM , Rating: 5
Companies really need to stop comparing digital and physical pricing to keep them at parity.

For starters, there ARE free and easily accessible alternatives of eBooks even if they are illegal.

Secondly... Digital distribution is cheaper, no manufacturing, less middlemen, no shipping etc'
They should pass those benefits to the consumer

Plus heavy price cutting can increase profits, Steam being a prime example.


RE: Chuck
By MrBlastman on 7/19/12, Rating: 0
RE: Chuck
By HrilL on 7/19/2012 4:28:16 PM , Rating: 4
In the Digital age you don't need a publisher either. On amazon I can take one of my books. Self publish it and pay them 30% of my sales. I choose the price I want to sell it at.

With big publishers they only really market and push a few popular books that they think will be successful. They give you perhaps 10% of the wholesale price of the book and a up front loan that you pay back from your 10% royalty. They also charge you for a lot of those things that you also pay back from your 10%.

Times have changed. We don't need the publishers anymore just like we don't need the record companies. These companies and their owners are afraid that no one needs them anymore.


RE: Chuck
By MrBlastman on 7/19/12, Rating: 0
RE: Chuck
By mcnabney on 7/20/2012 9:29:15 AM , Rating: 4
100% NOT TRUE!

You can self-publish and still get physical distribution as a secondary revenue stream. You get a much better deal too since your work is already in digital distribution and popularity of print is easier to gauge.

I know a number of people that have written eBooks and popularity in that format has allowed print distribution with favorable royalties. So don't go around telling people that independent writers that have been publishing to Amazon won't ever end up on shelves. They order their own prints and sell to book distributors or directly to major book sellers.


RE: Chuck
By MrBlastman on 7/20/12, Rating: 0
RE: Chuck
By danielravennest on 7/19/2012 4:42:01 PM , Rating: 4
quote:
Have you ever written a book? It is harder than you think. Try it sometime.


I am, and I am giving it away:

http://en.wikibooks.org/wiki/Space_Transport_and_E...

I'm working on the same system as Red Hat, software is free, custom support I charge for. Or for music, mp3 is free, live performance has a ticket price. It's dumb building your business model around something that can be copied by anyone at trivial cost.

Buggy whip makers went out of business when technology changed, and so will makers of simple blocks of prose. They need to find a new way to provide a premium product.


RE: Chuck
By MrBlastman on 7/19/12, Rating: 0
RE: Chuck
By Solandri on 7/19/2012 6:21:25 PM , Rating: 5
quote:
I assume then your books aren't your single source of income? What if they were? Then what would you do? Would you take up a day job?

Heh, I'd love to make a living playing games as my single source of income. But it ain't happening.

By definition, the Internet with its ability to share information worldwide at very little cost, decreased the value of books (especially technical ones). In the 1980s, if I wanted to look up the tensile strength of steel, I had to crack open one of my $100 textbooks or $150 CRC Handbook. They had to put work into compiling those facts and figures into a convenient book, and I had to pay for the convenience of being able to look it up quickly.

Today I (or anyone) can obtain that info with just a few keystrokes. The cost to provide and make available that information has dropped so low that someone (e.g. Wikipedia) is able to provide it to me for free (supported by donations). This happens to everything, not just books. I'm sure Seagate would love if if the laws were changed so they could still charge $10 per MB of disk space. But it ain't happening. The value of anything you make goes down over time, and you have to adapt - think up new ways to make it cheaper, or think of completely different things to make (i.e. get a new job).

When technology drops the value of what you produce below the point where you can make a living off it as your single source of income, it is not society's responsibility to subsidize you or completely restructure its laws to allow you to continue making a living off of it.


RE: Chuck
By JediJeb on 7/20/2012 2:48:56 PM , Rating: 3
quote:
When technology drops the value of what you produce below the point where you can make a living off it as your single source of income, it is not society's responsibility to subsidize you or completely restructure its laws to allow you to continue making a living off of it.


Exactly this! If a few independent authors begin cranking out horror books that rival someone such as Steven King in quality and are giving them away free, should they be banned from giving them away free just so Mr. King can still enjoy charging for his work?

Just as in my profession as a chemist, time was you needed a whole lab full of highly trained chemist to perform the tests, but now with advanced equipment, we can have a few chemist oversee many less trained technicians and get even more work done for the same cost. The same will happen in the publishing industry, authors have the talent, but the publishers are becoming less and less important. You will see a change from a very few very well paid authors in the business to many more less well paid authors. Instead of authors being an elite profession it will become more of a mainstream profession, whether or not that will be good or bad for the consumer is still to be seen though. You will either have a flood of mediocre works on the market, or you may have a few excellent authors that would never have been discovered pop up out there.


RE: Chuck
By fic2 on 7/19/2012 6:07:32 PM , Rating: 2
quote:
Supply and Demand are limited--there is no such thing as infinite amounts of either.


Except in the age of the internet supply is virtually unlimited. It doesn't take more of resources to sell 200,000 copies of an e-book than it does to sell 150,000.

quote:
So, do the math next time.


By that you mean make up numbers and use them in equations like you did?


RE: Chuck
By MrBlastman on 7/19/12, Rating: 0
RE: Chuck
By teldar on 7/20/2012 9:33:54 AM , Rating: 3
i think the point was that fixed and variable cost of digital distribution is very low.as a result, ebooks should not have the same cost structure as a book which is printed on paper, bound, shipped, stored, handled, shelved, and sold. The fact that in a different business structure, with digital distribution, authors can make more and consumers pay less at the same time because you can cut out one greedy greedy middleman.


RE: Chuck
By MrBlastman on 7/20/2012 11:07:20 AM , Rating: 2
Why is such a high level concept laid out simply so hard to comprehend?

I never discussed the difference between digital and retail distribution as well, it makes no difference. People are trying to say:

"The costs are different in each model."

This is obvious.

What isn't different is the grand concept I discussed. If you substitute costs you still will see a parity point with volume. My point still stands.

If you discount too deeply, eventually, it will hurt you more than it helps.

Come on people, read it again.

(And yes, cutting out the greedy middleman is great but you still aren't completely cutting them out with Amazon and Apple. Also, you lack an editor to review your work going the self-publishing route unless you hire one indendently, of course.)


RE: Chuck
By Netscorer on 7/20/2012 9:34:43 AM , Rating: 1
I like it when folks are establishing theories of supply and demand by using a completely made up numbers. You better get to politics kid - they like people like you there.

Supply and demand for digital items is not truly tested yet. As many said, there is no limit on the supply, except some artificial limits that publishers are establishing. On the demand front, the only limit is a finite budget that consumers are willing to pay for content. Lowering prices means consumers would buy more to the point of digital content purchasing becoming a compulsive habit (which increases total sales and leads to better overall profits), raising prices leads to consumers buying only the most cherished items and looking for an illegal way of obtaining the rest of the content, thus - negating any effect of price increases and artificial barriers and robbing the very people who produce content in the first place. In the long term all content competes with another for the consumer attention and thus books compete with TV and with video games and with music. With easy and cheap distributing channels available for most digital content, books are in danger of being left a odd man out when it comes to the purchase decision. Would I buy a Netflix subscription for the next two months or a single new book? Would I pay $5.00 for an mp3 album or $13.99 for one book in a series (knowing too well that if I ever intend to finish that series I would probably have to spend the same amount 4 or 5 times)? The book publishers think that they live in the magical world where profits are guaranteed to them as long as they keep relative monopoly on the content. But consumers quickly change their behavior and go for the easiest and cheapest way to use their time.


RE: Chuck
By Jaybus on 7/19/2012 2:52:26 PM , Rating: 5
quote:
I wonder how much Apple is paying this guy.

Apparently more than Amazon does.


RE: Chuck
By Natch on 7/19/2012 3:03:00 PM , Rating: 4
Personally, I learned, a long time ago (and as an EX resident of NY state) that the safest bet was to take whatever Chuck Schumer said was the right thing to do....and do exactly the OPPOSITE. He's a tool.


RE: Chuck
By mcnabney on 7/20/2012 9:35:55 AM , Rating: 2
He is in Congress. They are ALL tools.

This tool was manufactured with the assistance of big media companies based in New York, so it is no surprise that he popped-out of the publishing-industries toolbox.


Do eBooks hurt the economy?
By ShaolinSoccer on 7/19/12, Rating: 0
By danielravennest on 7/19/2012 4:45:50 PM , Rating: 3
Electrons are 100% recyclable.


RE: Do eBooks hurt the economy?
By rvertrees on 7/19/2012 4:56:43 PM , Rating: 5
I never understood this reasoning? Anytime you make something more efficient you cut jobs. The great thing about human ingenuity is that we can use that greater efficiency to improve our way of life.

So now we can get a better product for less cost and half the work force. That other half of the work force can go be productive in other areas.

It used to take almost all the inhabitants of an agricultural society to just produce food and build castles. Whoever through technology we no longer all have to be farms and can follow our own paths.

Advancement may cost jobs at the time but promotes new ideas and a better standard of living later.


RE: Do eBooks hurt the economy?
By mcnabney on 7/20/2012 9:43:32 AM , Rating: 2
The best example is farming. The percentage of the population required to engage in farming to feed the population has steadily decreased from over 50% to under 5%. And we have more food than ever. Needing fewer people to produce food has allowed them to do all kinds of other things. First, they drove the industrial revolution. Then, as machines replaced people in industry they moved on to the service and creative sector.

So yes, maybe fewer people grow up to become lumberjacks, but maybe they end up as programmers or cell phones salesmen instead.


So who pulled his finger?
By bupkus on 7/19/2012 1:43:19 PM , Rating: 2
Was it Apple or Amazon?




RE: So who pulled his finger?
By bupkus on 7/19/2012 1:56:53 PM , Rating: 3
Really? Another Washington politician photo with an American flag above his shoulder?
It's become its own parody.


RE: So who pulled his finger?
By GotThumbs on 7/19/2012 3:32:56 PM , Rating: 2
It's the publishers who choose the photo...but take a closer look. What is He doing with his hand? Is He declaring an allegence to Apple?

It's clear this is a joke of a plea and He only serves to show his lack of concern over justice and fair play when it involves the Apple ecosystem. Apples ecosystem resembles a prison. If is a very pretty and fashionable prison, but try and operate outside the fence with an Iproduct. You can't. Just wonder if general consumers (limited tech knowledge) will ever wake up to the reality of how much control Apple has over their lives.

A fool and his money.....


RE: So who pulled his finger?
By bupkus on 7/19/2012 11:13:20 PM , Rating: 2
Just another example of the tyranny of mediocrity.

"Mr. Gorbachev, tear down this wall."


Clueless
By Denigrate on 7/19/2012 1:37:21 PM , Rating: 3
Schumer is such a schmuck.




RE: Clueless
By AjCazz on 7/19/2012 1:44:04 PM , Rating: 2
People are more than happy to say stupid things when you pay them enough.


RE: Clueless
By Bad-Karma on 7/20/2012 3:29:46 AM , Rating: 2
Proof of inteligence isn't required to become a member of congress.

Just look at this guy! http://youtu.be/zNZczIgVXjg


One of us is confused...
By ppardee on 7/19/2012 2:02:37 PM , Rating: 2
I read the headline and thought "WHAT??? Chuck Schumer wants free market competition!? Are we talking about the same Chuck Schumer?"

What he's proposing is the OPPOSITE of competition. If publisher's aren't allowed to sell to people who would undercut Apple's prices, then there is no incentive for people to shop elsewhere. In a free market, pricing is the primary method of competition. If the product is the same and the service is (practically) the same, what is competitive?




RE: One of us is confused...
By bupkus on 7/19/2012 2:08:25 PM , Rating: 2
They're competing for the crumbs falling from Apple's huge piece of the pie.


RE: One of us is confused...
By fic2 on 7/19/2012 6:17:42 PM , Rating: 2
What is interesting is that this seems to be the opposite of what Apple did with the music publishers. Apple told them every song is $0.99 whether it is good/bad/popular/etc.

Maybe if they made every book $5 it would spawn a tidal wave of e-reading. I know I stopped buying hard covers when they went over $20. I don't buy that many new paperbacks since they are over $10 and approaching $15-20 since the publishers insist on making them the trade paperback.


wow
By bodar on 7/19/2012 3:13:55 PM , Rating: 2
quote:
Amazon would set the price for its eBooks far below normal hardcover value because it had an extensive library. Publishers either had to accept these lower prices or avoid the eBooks market entirely, which didn't seem to make sense when everything is going digital.

quote:
An agency sales model means that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price.

quote:
However, Schumer believes that Apple's entry into the eBooks market finally gave Amazon some competition and even lowered some eBook prices for consumers.


Does not compute. What kind of logic is being used here?

1. Amazon sets a price below hardcover value.
2. Apple lets publishers set a price and requires publishers to not sell to anyone below that price (presumably at a higher cost than Amazon's)
3. This magically lowers prices??? WTF?!




RE: wow
By ThisSpaceForRent on 7/19/2012 8:40:08 PM , Rating: 2
Cocaine's a hell of a drug.

-Rick James


RE: wow
By FastEddieLB on 7/19/2012 11:02:09 PM , Rating: 2
+6

I'm so glad I'm not the only one who noticed this one glaring flaw in this argument.


What?
By Dr of crap on 7/19/2012 3:14:32 PM , Rating: 1
I'm sorry,
but I've read the article and the posted comments, and I'm confused. The senator is siding WITH Amazon and AGAINST Apple, saying Apple's way of pricing is wrong.

I'd think most readers on here would be for ANYONE against Apple.




RE: What?
By chimto on 7/19/2012 5:58:05 PM , Rating: 2
huh? I read the article and sounds to me the senator is siding with Apple since he is not in favor of the lawsuit against Apple.

Anyone else wanna chime in?


Here's looking at you, Chuck U
By LBID on 7/19/2012 2:50:31 PM , Rating: 2
Really, anyone who takes a member of Congress at their word at this point is already an idiot...and Chuck U is the worst of the lot. All you have to do is give him a cash enema, and the results will come spilling out of his mouth in whatever direction you prefer. At least, I THINK that's his mouth that he's talking out of...




Noooo
By kingmotley on 7/19/2012 3:25:53 PM , Rating: 2
I like Apple, and they make good products, but that clause should be found to be unenforceable and stricken from all Apple contracts. They should also probably be given a huge fine, and the lowered to something small since they were the first one caught doing this.




WTF?
By NellyFromMA on 7/19/2012 4:46:44 PM , Rating: 2
Am I dumb, or did I just hear "Who care's about anti-trust and anti-competitive markets, let's not even find out IF violations are taking place because it will HARM the market established potentially illegally!"

My god...... is simply EVERYTHING too big to fail now? This is foolish... investigate!




I'm just wondering...
By masamasa on 7/19/2012 10:46:08 PM , Rating: 2
Who is sucking his shlong?




The fix is in.
By DrApop on 7/20/2012 2:58:05 PM , Rating: 2
Sounds to me like he is saying that is perfectly alright to allow price fixing.

Standard government hypocrisy.




AMAZON is a crook!
By blacquePattie on 7/19/12, Rating: -1
RE: AMAZON is a crook!
By Lazarus52980 on 7/19/2012 4:18:25 PM , Rating: 2
You want them to LOOSE a huge lawsuit? Who is it you want them to sue? Apple?


RE: AMAZON is a crook!
By Denigrate on 7/19/2012 4:29:08 PM , Rating: 2
What are you blathering about?


“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads














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